Russia, BP in oil drilling pact

MOSCOW, Feb. 15 (UPI) -- Russia, facing dwindling on-shore oil reserves, has signed an arctic exploration agreement with British oil producer BP, officials said.

Moscow's willingness to embark on new ocean drilling has other Western oil companies opening similar discussion with Russia, The New York Times reported Tuesday.

Russia and any new partners will be venturing into an area where other countries bordering the Arctic Ocean, including the United States and Canada, have been cautious about oil field development for both safety and environmental reasons.

After last year's BP oil spill in the Gulf of Mexico, American and Canadian regulators focused on the special challenges in the arctic where sea ice constitutes a constant risk to drilling rigs and crews and where any oil spill in winter could require cleanup efforts to take place in months-long total darkness.

Last week, Royal Dutch Shell put off plans for drilling off Alaska's arctic coast in the face of ongoing resistance by worried Washington regulators.

Russia, with an economy dependent on oil and gas that make up about 60 percent of all its exports, sees little choice but to go offshore, using foreign partners to provide expertise and share the billions of dollars in development costs.

Russian Prime Minister Vladimir Putin said BP is the safest company to join with for offshore work because it has learned its lesson in the gulf disaster.

"One beaten man is worth two unbeaten men," Putin said, citing a Russian proverb, after BP signed a deal with Rosneft, the Russian state-owned oil company.

The joint venture will see the companies exploring in the Kara Sea, an icebound coastal body of water north of central Russia.